Aspen Technology (AZPN)

Company

"Aspen Technology, Inc. provides industry-leading software and professional services that help process companies improve efficiency and profitability by enabling them to model, manage and control their operations. The new generation of integrated aspenONE™ solutions are aligned with the key industry business processes, providing manufacturers the capabilities they need to optimize operational performance, make real-time decisions and synchronize the plant and supply chain. Over 1,500 leading companies already rely on AspenTech's software, including Bayer, BASF, BP, ChevronTexaco, DuPont, ExxonMobil, Fluor, GlaxoSmithKline, Sanofi-Aventis, Shell, and Total." (company website)

Buy

20-Oct-05. I added to my earlier position. MarketEdge says that, based on technical analysis, AZPN is oversold, and this is a good entry point. Yesterday it touched up with the 50-day average; today it opened up and, after flirting with lower prices, continued to rise on very heavy volume.

• Price momentum (PPO) — decreasing, not a good sign
• Trend (ADX) — weakening, not a good sign
• Money flow (CMF) — went from strongly positive to slightly negative
• Relative strength (RSI) — falling, but ticked up again today
• Volume — very heavy volume on today's climb

Obviously, I'm putting a lot of faith in today's trading action and Market Edge's analysis.

Sell

4-Nov-05. After I sold my first lot of AZPN, I set a stop-loss order to sell this lot if the price dropped below the lower Bollinger band. That order was triggered late in the session. AZPN is due to report earnings next week, and it seems that the market is distinctly uneasy about it.